Tax Free Allowances
 

Some European airlines, (certainly in the UK, I am told) pay their crew something like a sector allowance which is free of tax, even when operating flights without night-stop.

Can anyone tell me how this is done and what provisions in the national law allow for this?

Are there perhaps other allowances that are tax free?

I'm not sure about other airlines but certainly in my airline (UK charter) our subsistence allowance is tax free (whether we night stop or not).

I think it's just whatever deal your company has negotiated with the Inland Revenue. As for fixed rate expenses allownace, well that's another ball game - the Inland revenue have just backed out of a signed agreement with our copmany and it's now subject to legal action - so watch this space as I'm sure if our FREA increases then other airlines will follow.

TFS ;)

It's a "Local Agreement" with the Inland Revenue. The allowances (or sector/duty pay) are to recompense us for the additional costs which we incurr during the course of our work. Like buying sarnies or water (if you work for some operators, or gin if you work for others) whilst at work. And then consider that same have to slip a few days - it is often very expensive where crew stop!. If we were taxed on these, then we would keep asking for these additional expenses to be taken into account for tax purposes and that would cause too much effort (for everyone!). Therefore, not all allowances are taxable.

We pay tax ion the first 32% of our allowances.